Witnesses have told of seeing people on fire and jumping from the balloon after it caught fire following an explosion on board.

"I saw tourists catching fire and they were jumping from the balloon. They were trying to flee the fire but it was on their bodies," Hassan Abdel-Rasoul, a farmer in al-Dhabaa, said. He said one of those he saw on fire was a visibly pregnant woman.

Photographer Christopher Michel was taking aerial photos from another balloon when the accident happened. He described the crash carnage on Twitter, where he posted a series of photographs showing the balloons ahead of the flight.

The remains of one of the victims in a body bag at the scene. (AP Photo/Hagag Salama)

"It was the balloon behind mine. I heard a loud explosion and saw smoke," he said.

Michel, who previously made a balloon excursion with an English pilot, said the Egyptian operation "didn't feel quite as professional" as that of his first voyage.

The US photographer told the BBC: "We flew over the ancient ruins. Just before landing in the cornfields, I heard an explosion and saw smoke. I think it was the balloon behind mine.

Rescue workers inspect wreckage at the scene. (AP Photo/Hagag Salama)

"I wasn't sure what had happened at first. It was only when we landed we heard the full extent of what happened."

"It's really, really tragic and everyone involved is in a lot of shock."

According to a security official, the balloon carrying at least 20 tourists was flying over Luxor when it caught fire, which triggered an explosion in its gas canister, then plunged at least 300m from the sky.

Photo from Luxor balloon tragedy. Photo: @chrismichel, Twitter

It crashed into a sugarcane field outside al-Dhabaa village just west of Luxor, 510km south of Cairo.

Bodies of the dead tourists were scattered across the field around the remnants of the balloon. An Associated Press reporter at the crash site counted eight bodies as they were put into body bags and taken away.

The death toll was at 18 but a British tourist later died of his injuries.

The fabric of the balloon largely remained intact. AFP PHOTO/STR

Hot air ballooning is a popular pastime for tourists in Luxor, usually at sunrise to give a dramatic view over the pharaonic temples of Karnak and Luxor and the Valley of the Kings, a desert valley where many pharaoh, notably King Tutenkhamun, were buried.

Luxor has seen crashes in the past. In 2009, 16 tourists were injured when their balloon struck a cellphone transmission tower. A year earlier, seven tourists were injured in a similar crash.

The toll puts the crash among the deadliest involving a recreation hot air balloon. In 1989, 13 people were killed when their hot air balloon collided with another near Alice Springs.

Loss felt around the world

UK tourists Joe Bampton, 40, his girlfriend Suzanna Gyetvai, 34, and Yvonne Rennie were believed to have been killed in the crash.

The Daily Mail reports Mr Bampton and Ms Gyetvai both worked for an auction house in Chelsea, south London and were due back to work next week.

"They were two people very much in love and a lovely couple. They were companions to each other," said Nick Carter, who worked at the auction house with the couple.

"They were very different people but they were very much in love. They loved being together.

"They worked here professionally and they were both artists.

"They lived together and have a whippet dog called Ollie. All of us are devastated and some are coping better than others. It's a horrible experience."

The other Briton, Ms Rennie from Perth in Scotland, is believed to have died at the scene. It is understoon her husband Michael survived the crash and was airlifted to a Cairo hospital.

Also among the dead yesterday were a Japanese couple in their 60s, among four Japanese who were killed, according to the head of Japan Travel Bureau's Egypt branch, Atsushi Imaeda.

In Hong Kong, a travel agency said nine of the tourists that were aboard the balloon were natives of the semi-autonomous Chinese city. It did not say whether all nine were killed. The information was posted on the agency's website.

In Paris, a diplomatic official said French tourists were among those involved in the accident, but would give no details on how many, or whether French citizens were among those killed.

French authorities were working with their Egyptian counterparts to clarify what happened. French media reports said two French tourists were among the dead but the official wouldn't confirm that.

Egypt's tourism sector is struggling

The crash was one of the worst accidents involving tourists in Egypt and is likely to push the key tourism industry deeper into recession.

Egypt's tourism industry has been devastated since the 18-day uprising in 2011 against autocrat leader Hosni Mubarak and the political turmoil that followed and continues to this day.

Luxor's hotels are currently about 25 per cent full in what is supposed to be the peak of the winter season.

Scared off by the turmoil and tenuous security following the uprising, the number of tourists coming to Egypt fell to 9.8 million in 2011 from 14.7 million the year before, and revenues plunged 30 percent to $8.8 billion.

Magda Fawzi, whose company operates four luxury Nile River cruise boats to Luxor, said she expects the accident will lead to tourist cancellations. Tour guide Hadi Salama said he expects Tuesday's accident to hurt the eight hot air balloon companies operating in Luxor, but that it may not directly affect tourism to the Nile Valley city.

Poverty swelled at the country's fastest rate in Luxor, which is highly dependent on visitors to its monumental temples and the tombs of King Tutankhamun and other pharaohs. In 2011, 39 percent of its population lived on less than $1 a day, compared to 18 percent in 2009, according to government figures.

In August, Egypt's Islamist President Mohammed Morsi flew to Luxor to encourage tourism there, about a month after he took office and vowed that Egypt was safe for tourists.

"Egypt is safer than before, and is open for all," he said in remarks carried by the official MENA news agency at the time. He was referring to the security situation following the 2011 ouster of autocratic leader Hosni Mubarak.

Deadly accidents caused by poor management and a decrepit infrastructure have taken place since Morsi took office. In January, 19 Egyptian conscripts died when their rickety train jumped the track. In November, 49 kindergarteners were killed when their school bus crashed into a speeding train because the railway guard failed to close the crossing.

The Muslim Brotherhood, Egypt's most powerful political force and Morsi's base of support, blames accidents on a culture of negligence fostered by Mubarak.

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